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Christmas online sales growth leaves the high street standing

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Online sales took off over Christmas, while business on the high street merely lived up to low expectations, said the British Retail Consortium (BRC) today.

The BRC-KPMG Retail Sales Monitor for December 2012 showed 1.5% growth in total UK retail sales during the month, with like-for-like growth barely holding steady at 0.3% growth. At the same time, internet sales put in their best performance of the year, with year-on-year growth of 17.8%. That’s the best ecommerce performance since December 2011 when annual growth came in at 18.5%.

“This is by far the strongest online sales showing this year,” said incoming BRC director general Helen Dickinson, “and marks a real return to form after momentum dipped in the previous few months. Online retail still accounts for a relatively small part of total sales but in December it played a disproportionately larger role in driving non-food sales.”

The online shopping season kicked off with Cyber Monday, and saw consumers using significantly more mobile commerce and click-and-collect, said the BRC. It suggested online was the main source of growth for more established retailers, and that those with multichannel operations had seen the most benefit.

Dickinson said the ease and convenience offered by online shopping had been boosted by the growth of smartphone and tablet sales. “Shoppers took advantage of the investment many retailers have made in making their websites easier to use across multiple devices,” she said, “in flexibility of delivery options as click-and-collect came of age and in security – they now feel much more comfortable putting their credit card numbers into their mobile phones.”

Of the slower total retail sales performance, Dickinson said they were “not a cause for celebration, but not a disaster either.” She said retailers had responded to low expectations of a challenging Christmas, and were “generally well prepared for shoppers’ limited spending power.” She added: “Footfall was disappointingly low but it seems that when people did make shopping trips they bought a lot in one go.”

Looking ahead to the January sales, she said the sense of running fast to stand still was likely to continue.

Meanwhile, David McCorquodale, head of retail at KPMG , said it had been a flat end to a flat year. “The stand-off between retailers and consumers looking for bargains and discounts continued throughout December and while some retailers will report record Christmas sales, most will breathe a sigh of relief because it could have been much worse. Footfall rose in the last week of the year as consumers sought out some bargains, but the year’s trading is made in the six weeks leading up to Christmas, not the six days after it.”

He predicted tough times in January as consumers faced up to credit card bills, and more of the same throughout the year.

Focusing on food, Joanne Denney-Finch, chief executive of grocery analysts IGD, said the week leading up to Christmas had remained the busiest of the year but December as a whole had been flat. She also predicted challenging conditions in 2013 as 51% of shoppers, according to IGD’s ShopperVista research, look to save money on grocery shopping in the six months ahead.

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